Green Stocks for Staying in the Black

By Farnoosh Torabi

TheStreet.com Correspondent
9/20/2007 3:59 PM EDT
URL: http://www.thestreet.com/newsanalysis/conscious-companies/10376921.html

After seeing a screening of An Inconvenient Truth last fall, 31-year-old Karyn Ravin regretted ever leasing her gas-guzzling Nissan Pathfinder. She should have bought a Toyota Prius, she realized.

But with one more year left on her SUV's lease, Ravin opted for the next best green thing -- 100 shares of Toyota (TM) , an auto company known for its dedication to fuel efficiency. "It was doing our little part," says Ravin, owner of Maletzky Media, a public relations and marketing firm in New York City. So far, the stock's been friendly to her broad-based retirement portfolio, climbing roughly 15% since she bought it last September.

Indeed, green is the new black on Wall Street, with individuals increasingly placing bets on eco-friendly stocks, mutual funds and exchange-traded funds. "People understand you don't have to sacrifice returns to invest in an environmentally responsible way," says Jack Robinson, lead portfolio manager of the Winslow Green Growth Fund (WGGFX) .

While some financial experts preach that the greener the investment, the better, there are potential downsides. "It's a speculative sector as a whole," says John Quealy, analyst at financial services firm Canaccord Adams.
For one, this sector is vulnerable to the demand for traditional energy.

"If we saw oil go back down to $50 [a barrel] , all of a sudden there's not going to be as much demand for green stocks," says Tom Lydon, editor of ETFTrends.com, a blog about ETFs.

What's more, investors should watch out for bursting bubbles within certain subindustries, such as solar, whose capital investments, experts caution, run the risk of outpacing demand. "It looks to me like too much manufacturing capacity is coming on too quickly," says Jim LoGerfo, founder of Vortex Energy LLC, a financial advisory firm.

He compares today's solar popularity to the 2006 heyday of ethanol, when biofuel project financing was up 1,700% from 2004, according to researchers at New Energy Finance. "Both industries are being hugged to death," says LoGerfo.
Considering that, here are some ways to hug the world and curb your risk:

Mutually Green: Green mutual funds are popular because they offer diversified sector exposure. The Winslow Green Growth Fund invests in 30 to 40 small-cap, high-growth green stocks. "Green" to Winslow means promoting healthier lives, plain and simple. Some of the highest-growth players in the no-load portfolio include Chipotle Mexican Grill (CMG) and Fuel Tech (FTEK) . The Green Century Balanced Fund (GCBLX) and the Spectra Green Fund (SPEGX) are two other mutual fund options.

ETFs -- Pure and Liquid: For pure exposure to a certain index of green companies, such as simply solar or clean tech, experts recommend ETFs, which trade like stocks, so they're more liquid than mutual funds. PowerShares Wilderhill Clean Energy Portfolio (PBW) and the New Alternatives Fund (NALFX) are widely popular.

Stocks With Green Ingredients: Adding, say, GE (GE) or Toyota -- industry-leading stocks with active green initiatives -- to an existing portfolio can also give investors green exposure while mitigating risk. Others include Advanced Micro Devices (AMD) , Dell (DELL) and Google (GOOG) . One caveat: These companies may not see direct revenue gains from their green doings as quickly as "pure" green stocks. "If you bought Applied Materials (AMAT) today, for example, you are buying something that, in terms of revenue, is not a 'clean tech' company. Give it three years," advises LoGerfo.
Ravin says she'll hold on to her Toyota shares for the long haul, in addition to trading in her SUV for a Prius when her lease is up. "We're trying to make our carbon footprint as small as possible," she says.

Teva Pharmaceutical Drug Fails Study

Teva Pharmaceutical Industries' Lupus Drug Candidate Fails to Meet Goal in Midstage Study

September 19, 2007: 01:56 PM EST

NEW YORK (Associated Press) - Drug developer Teva Pharmaceutical Industries Ltd. said its lupus drug candidate edratide failed to meet its goal in a midstage clinical trial.

The Phase II clinical trial involved 340 patients with systemic lupus erythematosus from 12 countries. The goal of the study was a reduction of lupus disease activity over a 26-week treatment period. The drug was given in weekly injections.

Symptoms for systemic lupus erythematosus include fatigue, low-grade fever, muscle aches, arthritis, ulcers of the mouth and nose and facial rash.

Teva said the drug was shown to be safe and well tolerated in the study. The company said future plans for the drug candidate has not been determined.

Shares of Israel-based Teva rose 30 cents to $44.25 in afternoon trading

Seven technically strong stocks to buy on a dip

12:15p ET May 2, 2007 (MarketWatch)

LOS ANGELES (TechTrader) -- A stock market that looks to be topping at least short-term makes trading on the long side rather nerve-racking, but some stocks with extremely strong technicals should not be overlooked by traders with a longer time horizon.

The following are seven stocks setting up for potential intermediate- to longer-term (three- to six-month) moves, and although they may be a bit short-term overbought and the market may be due for a retracement of the recent strong run-up, they're worth monitoring for potential entry points, especially on low-volume pullbacks to support.

Taser

Looking at the daily chart of Taser going back two years, you can see a large narrowing coil-type pattern has formed. The stock recently has been thrusting back up to test the major declining tops lines and key overhead resistance. Technicals are surging and positively diverging, indicating this stock may want to break out and create a new intermediate- to long-term uptrend.

Key overhead resistance at the October high at around 10.20 may be tested next. Beyond that a move above the February-April double-top up near 11.30 - 11.35, which is secondary resistance, on strong volume could get Taser going again. Targets would be the mid-teens intermediate-term and beyond that a move to the low-20s is possible. Short-term support is at 8.

IDM Pharma

IDM Pharma is another stock on the move. This junior biotech, which had been in a seven-year down-channel, exploded in early April through its declining tops line and out across the mid-year 2005 and spring 2006 resistance highs around 6.5.

The stock then backed off and formed a very distinct pennant pattern, which was followed by another breakout last Friday, although the stock pulled back on Tuesday. The technicals, however, look great, and IDM could reach our initial trading target in the 13 range on an intermediate basis, with our longer-term projection in the 18-19 range. Short-term support is in the 6.5-7 zone.

Research Frontiers

Research Frontiers also broke out recently, thrusting out of a two-year base pattern on strong volume at the very end of January. The stock followed through in early February and then backed off very bullishly on low volume, holding the 8.25 - 8.5 area.

Since then, REFR has stair-stepped its way up to nominal new highs, reaching as high as 12.75 a couple weeks ago before backing off recently to retest the three-month rising bottoms line and the 40-day moving average. It did this on low volume with the technicals holding up very well. Beneath the current levels, there's strong short-term support around the 8.5 - 9 zone, but targets are 14, 17 and 20 short-, intermediate and longer-term.

Nymox Pharmaceutical

Breakouts of long bases on strong volume are frequent harbingers of continued price appreciation, and Nymox Pharmaceutical is another recent breakout stock. Earlier this year the stock broke out of a six-year basing pattern when it surged across key overhead resistance at around 5.75. After a secondary surge, the stock reached as high as 7 before backing and filling in a two-month large pennant-type pattern.

That pennant was recently taken out with another surge late last week. The stock backed off at its March high and is currently consolidating, but the target at the top of the intermediate up-channel indicates a move to 9 is possible, my initial trading target. Secondary target is around the 13 area, and longer-term target in the high teens. Moving average and price support is around 5.

Ceragon Networks

Similarly, Ceragon Networks just last Friday had a strong price-volume surge out of a three-year base pattern, and as a result hit the top of its nine-month rising channel. It could easily back off and consolidate, but there's a very distinct possibility that the early 2004 highs around 8.75 will be tested in the not-too-distant future.

That's my initial trading target, followed by a secondary target around 12 and longer-tem target at 18. Short-term support is around the 6 level and beneath that the trendline and moving averages would be between 5.5 and 5.75.

Spectrum Control

Spectrum Control built a nice multi-year base pattern from the low in 2001 through the spring of 2006, and although it had a nominal breakout last summer, it then pulled back in the fall and consolidated, testing the bottom of the nine-month rising channel before a January surge took it to more new multi-year highs.

Another pullback/retest on low-volume occurred in February and March before a strong price-volume breakaway gap occurred, with a strong follow-through in early April. Since then the stock has been in a very positive bullish-looking consolidation, and I'm expecting support around the 12 - 12.25 area to hold. Should resistance at 14.85 be taken out, the stock should move to our initial trading target around 17. Intermediate target is in the 20 - 20.5 area, and longer-tem target in the mid-20s.

Exide Technologies

Finally, Exide Technologies had a long drop from 24.5 down to under 2.5 from the spring of 2004 to the spring of 2006, after which the stock then turned around, moved up, backed off and retested and formed an 18-month base pattern. In early January the stock began a move, followed by a four-day bullish flag pattern that then resulted in a very strong price-volume surge, taking the stock to new multi-year highs.

A brief pullback held support and then the stock made higher highs. It's currently consolidating and near its moving average and trendline. XIDE should make it near the 12 range, my initial trading target, if it gets out over the 9.75 area. Secondary target is at 17 and longer-term target in the low 20s. Price support is at 8.25 - 8.5.

Harry Boxer is a 35-year veteran technical analyst and author of TheTechTrader.com, a real-time diary of his intraday and intermediate-term trading ideas. He has no holdings in stocks mentioned in this article. (thetechtrader.com)

Content found in The Guru's Corner is subject to the terms and conditions found in the Disclaimer and does not represent a recommendation of investment advice. Investors should seek the advice of a qualified investment professional prior to making any investment decisions. (Disclaimer)

NEW STOCK PURCHASE IDEAS

Now that we have all this money, who wants to start making suggestions? Click on COMMENT below, and post your ideas.

SEPTEMBER MEETING STOCK BUYS/SELLS

Orders placed Monday, August 10, 2007

We SOLD 100 shares of AMGN at $51.50 - this leaves us with 50 shares
We SOLD 100 shares of BBBY at $32.1523 - this closes out our position

We have the following TRIGGER ORDERS SET:

If CRNT's bid is less than or equal to 14
Sell 100 CRNT at limit $14

If INTC's ask is less than or equal to 24
Buy 100 INTC at marke

Both orders will expire on October 15th, the Monday after our next meeting, in case we change our plans.

The sales resulted in $8337.01. We currently have $811.29 in our Money Market account. When I add our dues collected on Saturday of $756, we will have a balance of $9,755.98 in which to purchase new stocks (this amount DOES NOT include the $142.32 of Petty Cash).

OUR AT&T STOCK, AND PREFERRED STOCK BASICS

For those who didn't get this at September's meeting, following is some information about the PREFERRED AT&T stock that we own. The facts about our stock:

- The interest rate is paid at 6.375% on the initial investment
- Interest is paid quarterly in May, August, November, February
- This stock expires on 2/15/2056
- It is Callable after 2/5/2012

from fool.com

Preferred Stock Basics

Ask three average investors to define "preferred stock," and you'll probably get answers like this:

"It's sort of a bond and sort of a stock, only less so."
"I think it's like a stock with no voting rights. But you get more dividends, and you get paid before common stockholders if the company liquidates. Is that it?"
"I don't know, man, but I prefer stocks that make me a lot of money, yuk yuk!"

As it turns out, all of those answers have some truth to them. Preferred stocks do combine elements of common stock and bonds, they do lack voting rights but have a dividend and precedence over common stocks, and most long-term individual investors should be buying good common stocks instead. But preferred stocks (or "preferreds" for short) are useful investments in some situations. It's worth knowing what they are, how to buy them, and when you should consider owning them.

The basics
Preferreds, which are generally sold with institutional investors in mind, seem to come in a bewildering variety of configurations. But for the most part, the features are actually pretty straightforward. Like common stock, preferred stock is usually traded on a stock exchange and represents an ownership interest in the company (unlike a bond, which is a securitized debt). But like bonds, preferred stocks usually have a fixed payment stream -- which is often tax-advantaged -- and no voting rights. Many preferreds are issued at a price of $25 or $50 per share, and while prices do trade up and down, they are generally less volatile than common stock prices.

The usual risks of preferreds are a lot like the risks around corporate bonds. Rising interest rates can make the payment stream less attractive. If the company goes out of business, it'll often take your money with it. Also, with preferred shares, liquidity can sometimes be a problem -- meaning that if you have to sell in a pinch, you might be stuck, or at least compelled to take less money than you think your stock is worth.

A preferred stock may also fall into some or all of the following categories:

Convertible. A preferred that is convertible can be converted into common stock at a set price after a set date, usually at the shareholder's option. As that date approaches, the preferred will trade more and more like the common. (A preferred that isn't convertible is called a straight preferred stock.)

Callable. A callable preferred stock can be "called" -- repurchased by the company -- at a fixed price, after a certain period (usually five years), at the company's option. Most preferreds are callable, and unfortunately for investors, they tend to get called when interest rates are falling -- making other sources of financing more attractive to the company.

Cumulative. Most preferreds are cumulative, meaning that if the company ever misses a dividend payment, it will accrue and be owed to stockholders later. In general, preferred shareholders are above common stockholders in the pecking order of dividends. Before a common stock dividend can be paid, all payments to preferred stockholders must be up to date. Preferreds that aren't cumulative -- there aren't many, but they exist -- usually have a higher yield to compensate for the added risk.

Why would I want one?
Does a 6% yield taxable at 15% (sometimes 5%) sound appealing? For a retiree looking for income outside of a tax-advantaged retirement account, the right preferred stock can be a great option. For more sophisticated investors, convertibles selling at a discount can sometimes offer great opportunities to invest in a company -- allowing an investor to receive an income stream while waiting for the common stock to rise before choosing to convert.

For example, if you're bullish on Ford (NYSE: F), you can invest in Ford's convertible preferreds (NYSE: F-PS), which trade at a discount from their $50 call price, are convertible into 2.8249 shares of common, and pay 6.50%. The convertible feature is still "underwater" -- the price that would be realized from a conversion is higher than the current common stock price. But the tax-advantaged 6.50% dividend is a nice incentive to stick around while waiting for the company's recovery plan to take hold, especially since the company isn't currently paying dividends on the common stock. Other companies that offer preferred shares include General Motors (NYSE: GM), Chesapeake Energy (NYSE: CHK), and Freeport McMoRan (NYSE: FCX).

MARKET VS. LIMIT ORDER - WHAT IS THE DIFFERENCE?

from fool.com

If you place a market order, you're essentially asking your broker to buy or sell a given security as soon as possible, at the best available price. This is the most common kind of order, and the simplest.

With a limit order, you state your desire to buy this or that, but only at a certain or better price. So if you place a limit order to buy 50 shares of the Home Surgery Kits Co. (Ticker: OUCHH) at $45, and the stock is trading around $48, your order won't be filled until or unless the stock falls to $45 (or lower).

It depends ...
For many trades, market orders are good enough. If you know you want to own shares of a certain company fairly soon, it's trading at a price you're comfortable with, and it's not a very volatile stock, a market order should serve you well.

You might use a limit order if you want to own a certain stock but think it's overvalued now. If so, you could set a lower "limit" at which you'll buy. If it reaches that limit, you'll buy the stock. If not, your order would expire unfilled. This is one of the downsides of limit orders: Sometimes you just don't get the stock you wanted.

"If you are buying a stock like IBM (NYSE: IBM), then market is the way to go. If you are buying a small-cap that trades only a few shares a day, then put in a limit or you might get a really bad price."

BID/ASK PRICE - WHAT IS THE DIFFERENCE?

from fool.com

Bid/Ask Price

Could someone please explain what bid and asked prices are?

Think of an auction. The "bid" is the price closest to the last transaction that buyers are willing to buy at. The "ask" is the price closest to the last transaction that sellers are willing to sell at. You can also think of them as the market price of a stock--bid being the market price if you are selling "at the market" and ask being the price if you are buying at the market. The difference between the bid price and the ask price is called the "spread." It is a fee that the market maker pockets as payment for keeping the market liquid. Generally, you will only see bid and ask prices quoted for NASDAQ stocks. On the NY and American exchanges the spread is a more uniform 1/16 to 1/8 point.

OK, so what is the bid/ask "size" that I see in quotes sometimes for stocks trading on the NYSE and ASE?

The NYSE and other listed exchanges (ASE, Midwest, Boston, Pacific etc.) use "specialists" to match up the orders for a particular stock. The size of the bid/ask shows how many shares the specialists has available at those prices. For example:

Bid 14 1/4 x Ask 14 1/2 37 x 90 ---- bid-ask size

This means that at the current moment, the specialist has offers on his books (bids) to buy 3,700 shares at 14 1/4 and offers (asks) to sell 9,000 shares at 14 1/2.

In general, a larger ask size than bid size means that at the moment, there are more sellers than buyers and thus downward pressure on the stock's price. This could change in an instant though, so it isn't that helpful unless you're a market maker or very sophisticated trader.

On the Nasdaq, because there isn't one specialist balancing a book of orders like there is on the more "organized" exchanges, the size of the bid/ask means almost nothing.